Wage rises 'below inflation'

Pay deals are running at 3.2%, more than 1% below retail price inflation, the figure used by union wage negotiators, according to a new report.

Deals in private firms were slightly higher at 3.5%, according to an analysis of 300 settlements in the last three months by Industrial Relations Services (IRS).

Increases ranged mainly from 2% to 4%, with more than two thirds of awards higher than a year ago.

IRS Pay and Benefits editor, Sarah Welfare said: "Since the beginning of this year, private sector pay awards have been running at their highest since November 1998, but most employers are still keeping pay rises well below the level of headline inflation.

"Now that the busiest part of the pay bargaining year is over, a further surge in the value of pay deals this year looks unlikely, especially as headline inflation is forecast to fall back."